Australian consumers are cautiously opening their wallets as a pickup in confidence filters through to increased spending, a survey says.

The Commonwealth Bank Business Sales Indicator rose by 0.6 per cent in trend terms in November after rising by 0.5 per cent the previous month.

The business sales indicator, which is compiled from the value of credit and debit card transactions through Commonwealth Bank merchant facilities, was 6.8 per cent higher in November than the same month a year before, the fastest annual growth in 22 months.

The bank’s gauge of spending across the economy recorded monthly trend growth over the past year but the pace of growth was slower than in 2006 and 2007.

CommSec chief economist Craig James said the business sales indicator showed consumers and firms were being conservative about an improving economy.
Full Story

Christmas stockings may be a bit skinnier this year despite a high level of consumer confidence, and an economy that is outperforming other advanced countries.

Treasurer Wayne Swan concedes that the country still faces many challenges, such as rising unemployment, but his government will be working just as hard to ensure an enduring economic recovery.

Still, one financial market strategist, who has a nose for predicting official interest rate decisions correctly, does not believe the Reserve Bank of Australia (RBA) will lift the cash rate again in December.

Last week’s monthly Westpac-Melbourne Institute consumer sentiment survey found that while confidence fell 2.5 per cent in November, on the back of rising interest rates, it remained 38.3 per cent higher than a year ago with optimists still clearly outweighing pessimists.
Full Story

Australians appear to have taken a sensible approach to their household budgets during the global recession, using debit cards rather than running up debt on credit cards.

The Reserve Bank of Australia’s (RBA) annual report on the payments system was tabled in parliament on Wednesday.

It showed that while credit card transactions had risen 3.8 per cent in 2008/09 compared to the previous financial year, debit card transaction surged 14.7 per cent.

It said this was partly due to the economic slowdown over the past year.
Full Story

More Australians are looking to spend rather than save money following weeks of new positive economic data pointing to a sustained economic recovery, a financial comparison company says.

RateCity has recorded an 84 per cent rise in applications for loans and credit cards in the three months to September, a survey of its business data shows.

“During the peak of the global financial crisis at the start of the year, Australian’s were holding onto their money and looking for the best accounts to secure a good return,” RateCity CEO Damian Smith said.

“We’re now seeing the opposite trend, as Australians are now more confident in the economy and are looking at not only spending their savings but also borrowing more.”
Full Story

Australian consumers remain willing to spend but are doing so by substituting generic, lower-priced alternatives for brand-name items and bargaining for the best deal, a report says.

They are also maintaining loyalty to their trusted brands and are not sacrificing certain core items such as quality meat and vegetables and house insurance, amid the global recession.

The findings are in a survey by research company Directional Insights on behalf of AMP Capital Shopping Centres, which owns 39 retail centres across Australia and New Zealand.

Directional Insights managing director Helen Bakewell said consumers had a “new mindset” in their approach to shopping.
Full Story

Debit cards are set to become the most popular form of payment by the end of the year, as it saves consumers from clocking up debt, a report says.

Consumers have increasingly turned to debit cards as their preferred payment method, shunning credit cards whenever possible due to hefty surcharges and reluctance to go further into debt in tough economic times.

The report by banking research firm East & Partners found 28.9 per cent of all merchant sales were paid with a debit card in the six months to June, up from about 24 per cent in the previous six months.

East & Partners financial markets analyst Zoran Knezevic said after a gradual shift towards debit cards over the past few years, the pace had accelerated quite rapidly over the past six months.
Full Story

Consumers, many of them armed with federal government stimulus payments, spent a record $19.4 billion shopping in April.

But the stimulus package failed to lift the performance of companies, with profits falling in the March quarter.

Such weakness cements expectations for a frail set of national accounts on Wednesday that will confirm the economy is in recession.

Retail trade rose by a seasonally-adjusted 0.3 per cent in April, building on the solid 2.2 per cent increase in March, the Australian Bureau of statistics said on Monday.
Full Story

photo credit: Paul KeleherA better than expected rise in March retail sales will force the Reserve Bank of Australia (RBA) to keep further interest rate cuts on hold, economists say.

The value of retail trade rose by 2.2 per cent in March to a seasonally adjusted $19.296 billion, the Australian Bureau of Statistics (ABS) said on Wednesday.

Economists had forecast a seasonally adjusted rise of just 0.5 per cent for March, and attributed to the strong growth to consumers hitting he shops in anticipation of the government’s one-off bonus payments.

Over the March quarter, retail sales rose by 1.0 per cent to $53.959 billion, seasonally adjusted and compared with market economists’ expectations of a 0.8 per cent rise.
Full Story

Low-income and single-parent families should rein in their spending this Christmas or risk difficult times ahead, an economics expert has warned.

Associate Professor Roslyn Russell from RMIT University’s School of Economics, Finance and Marketing said low-income and single-parent families often went to great lengths to please their children at Christmas, to their financial detriment.
Full Story